New GI Bill Will Increase Funding for Veterans’ Education

Veterans, current service members, and, in some cases, their dependents, will receive significantly greater support for higher education under legislation signed by President Bush on June 30. The Post-9/11 Veterans Educational Assistance Act of 2008, widely known as the "New GI Bill," provides for payments to institutions for veterans’ tuition and fees (capped at the amount paid by an in-state student at the most expensive public institution in the state), a monthly stipend for living expenses, and an annual stipend for books and supplies. In addition, a new Yellow Ribbon GI Education Enhancement program would provide matching funds to higher-cost institutions that choose to provide additional support to veterans. The legislation was included in the war supplemental appropriations bill (HR 2642).

The new programs are scheduled to be operational by August 1, 2009. NACUBO, the American Council on Education, and several other associations are working with the Department of Veterans Affairs (VA) to help work out administrative details of implementing the act, including designing a system for making tuition and fee payments to institutions.

New Benefits

The current Montgomery GI Bill provides a maximum monthly stipend of $1,100 to eligible veterans who chose to buy into the program by making a nonrefundable contribution of $1,200 to $1,800 early in their military service. The most that a veteran can receive under this program is $9,900 a year, for up to 10 years.

Under the new GI Bill, the maximum benefits that eligible veterans will receive, for up to 36 months, are:

The amount of tuition and fees, not to exceed the undergraduate tuition at the most expensive public university in the state, paid to the institution.

A monthly housing allowance, paid to the student, equal to the basic housing allowance payable to a military E-5 with dependents residing in the same ZIP code as the institution. Current housing allowances, for example, are $2,512 in San Francisco and $897 in Evansville, Indiana.

A stipend of $1,000 per year for books and supplies, prorated and paid to the student at the beginning of each semester, quarter, or term.

A one-time stipend of $500 for relocation or travel expenses paid to students living in rural areas (defined as counties with less than seven persons per square mile).

Tutorial assistance up to $1,200 paid to the student, if certified as necessary by the appropriate professor.

Personnel using the educational benefits while on active duty will not receive stipends for housing or books. Students enrolled half-time or less, and those enrolled in distance-learning programs, will not receive a housing allowance.

Eligibility Criteria

Individuals who serve or have served on active duty in the military after September 10, 2001, will be eligible for educational benefits under the new GI Bill. An individual needs 36 months of active duty, or at least 30 days of active duty followed by discharge due to a service-connected disability, to be eligible for the full amount. But even 90 days of active duty are enough to qualify for 40 percent of the maximum benefit, with the percentage "earned" increasing with the length of service. When a student is eligible for only a certain portion of the maximum benefit, each type of payment is ratably reduced.
Veterans remain eligible for 15 years after their last period of active duty of at least 90 days. In certain cases, current active-duty personnel will be able to transfer eligibility to spouses or dependent children.

Voluntary Enhancements

The Yellow Ribbon program establishes a partnership between higher education institutions and the VA to provide additional grant support for veterans attending institutions that charge amounts that exceed the bill’s cap on tuition and fee payments. Colleges and universities may voluntarily enter into an agreement with the VA to contribute a portion of those expenses, with the VA contributing an equal amount up to 50 percent of the remaining tuition and fees.

An agreement between the institution and the VA would specify:

The manner of contributions made by the college or university;

The maximum amount of the contribution per student; and

The maximum number of students for whom the institution will make contributions each year.